Sending Money to Family in a Foreign Country

Many people move from developing countries to the United States and Europe in hopes of better financial opportunities. As they start to accumulate wealth, they make remittances to their families back home. A remittance is a specific term for a foreign worker who makes a money transfer to his country of origin. This practice is a growing trend that plays a large part in the economic development and prosperity of many countries. The act of sending money to support a family member can be traced as far back as the 19th century.

European countries such as Spain, Ireland and Italy were dependent on money transfers from their expatriates around the globe. In fact, up until 1946, Spain counted on remittances for 21 percent of their total national income. Interestingly, in England the flow of capital was in the opposite direction of today's money transfers; instead of sending cash back to a home country, funds were sent from England to its distant colonies. Today the majority of remittances are sent from the United States to three major regions: Asia, Latin America and Africa. In Asia the top recipient countries are: 

• India
• Philippines
• China

The largest recipient of funds in Asia is India, with over 55 billion USD received in 2010 alone. Latin America is another region that is dependent on money transfers from the United States as a major source of its GDP. Some of the top recipient countries in this area are:

• Mexico
• Honduras
• El Salvador
• Haiti

Haiti counts on money transfers to make up over 30% of its GDP, rendering it the most remittance dependent country in Latin America. There are about 30 million African Adults living in countries outside of their continent with the potential of sending money back home. Statistics from the World Bank show that the top recipients in Africa are:

• Nigeria
• Sudan
• Kenya

Out of these countries, Nigeria collects the highest amount, with over 10 billion USD received in 2010 alone. The large amount of remittances has given rise to many vendors who provide money transfer services. In the past you had to go to a bank in order to send the money. Today there are a growing number of internet sites that offer money transfer services online. These provide a quick, safe, and easy alternative to the in person approach. Average costs range between 5 and 10 dollars for every 1K USD sent. Regardless of the method or region, money remittances allow for the sharing of prosperity across the globe.